Three indicators suggest PEPE token may be poised to mislead bullish investors following a 2,000% price surge.

The new meme-coin Pepe (PEPE) has entered a significant correction phase after experiencing an increase of over 2,000% since its launch a few weeks ago.

On May 3, the PEPE price fell to $0.00000089, representing a decline of approximately 35% from its peak of $0.00000138 reached two days prior. Consequently, this correction resulted in a market capitalization decrease of nearly $80 million, causing it to drop out of the top-100 cryptocurrency index.

Pepe price performance since market debut. Source: CoinGecko

A combination of technical and fundamental indicators suggests potential further declines for the PEPE price.

Retail interest declines

PEPE’s daily trading volumes have decreased across both centralized (CEX) and decentralized exchanges (DEX) as prices have fallen. Similarly, Google trends for the term “Pepe Coin” have dropped from a score of 100 to 7 within a day, indicating that retail enthusiasm has diminished over the past 48 hours.

Interest rate for the keyword Pepe Coin. Source: Google Trends

PEPE whale distribution raises concerns

The top 100 wealthiest PEPE addresses, referred to as “whales,” hold 45% of the token’s circulating supply, according to data from CoinCarp.com.

Top PEPE distribution. Source: CoinCarp.com

While these 100 addresses may belong to different individuals, a single entity can manage multiple addresses, which allows a limited number of whales to exert significant influence over the future price trends of PEPE, increasing the risk of price manipulation.

For example, Lookonchain disclosed that five addresses allegedly associated with the Pepe team realized a profit of $1.23 million in a market with low liquidity. They acquired 8.87 trillion PEPE tokens at a low price and sold over 90% of their holdings at a higher price on Uniswap.

PEPE buying and selling schematic. Source: Lookonchain

Some of the largest PEPE holders are centralized exchanges. However, according to data monitored by analyst 008.eth, non-exchange PEPE whales have recently reduced their positions, indicating profit-taking that aligns with the ongoing price correction.

20% PEPE correction anticipated?

PEPE has surged without substantial fundamentals supporting it, and the evidence of fewer whales driving the uptrend could undermine the gains in the near term. Technical indicators support this view.

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For instance, the four-hour chart indicates that PEPE/USDT has established higher highs, yet its relative strength index (RSI) has created lower highs since April 30. This indicates a bearish divergence, suggesting that PEPE’s upward momentum may weaken in the short term.

Additionally, PEPE seems to be approaching its 50-4H exponential moving average (50-4H EMA; the red wave) near $0.0000047410, which is a 20% decrease from current price levels.

A further decline below the red wave could lead the token to test the $0.00000020-0.00000017 range as the next target for downside movement.

It is important to note that the PEPE token is new and therefore lacks sufficient price history to predict its future price movements. Furthermore, meme-coins are known for their extreme volatility and significant price fluctuations.

For example, Dogecoin has surged 7,000% since 2020, largely due to the vocal support of billionaire investor Elon Musk.

This article does not provide investment advice or recommendations. Every investment and trading decision carries risk, and readers should perform their own research before making any decisions.